Yesterday brought some exciting news for California – Governor Brown signed into law what was Assembly Bill 361, putting into place a new form of corporate entity: the Benefit Corporation.

Traditional corporations are legally bound to put profit maximization ahead of other goals. If they don’t, shareholders may sue. Benefit corporations operate under a broader definition of success – one that includes material positive impact on society and the environment. Specifically, benefit corporations must: 1) have a corporate purpose to create a material positive impact on society and the environment; 2) redefine fiduciary duty to require consideration of the interests of employees, community and the environment when making decision; and 3) publicly report annually on its overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard.

Vermont and Maryland were the first states to enact benefit corporation legislation, in 2010. New Jersey, Virginia and Hawaii followed earlier this year. New York is poised to become the seventh state to join the movement, and similar legislation has been introduced in Colorado, Michigan, Pennsylvania, and North Carolina.

Entrepreneurs with a desire to advance a social or environmental mission while generating value for shareholders now have another concrete tool for doing so. It isn’t the only tool – B Corp status is another way for a for-profit corporation to signal its intention to prioritize social and environmental benefit along with the creation of shareholder value. B Lab, the nonprofit organization that certifies B Corporations, was one of the sponsors of the California’s benefit corporation legislation.

Like many, we’re still following the evolution of the L3C (low-profit limited liability company), a corporate form just a little over three years old. Over the course of those three years nine states and two federal jurisdictions have enacted L3C laws, and according to a recent tally by interSector Partners, there are now 488 L3Cs organized across the country. The L3c movement has not progressed without controversy, but much of that has focused on the usefulness (or not) of the L3C in paving the way for foundations to fund for-profit entities via program-related investments (PRIs). A 2010 research study indicated that the ability to pursue PRI’s wasn’t, in fact, the primary motivator for most early L3C founders – that the appeal lay more in the ability to create “a for profit with a nonprofit soul.”

Time will tell which corporate form – or forms – will truly take off. For now, I’m just excited that there are an increasing number of options. May the momentum continue.

I was driving along the edge of Lake Erie the other day, listening to an interview with Darell Hammond about KaBOOM! I was momentarily distracted when he said “we work with the grassroots and the grasstops to address the play deficit.”  At first, all I could think was, “where are the jargon police when you need them?”

But I was drawn back into the discussion when he told a story from his childhood – one about he and other neighborhood kids who competed to see how high they could swing, standing up, hoping to get enough velocity to swing the whole way around.  While attempting one of these standing 360 feats a piece of the swing broke and he fell.  He noted that he got pretty scraped up, but no attorneys got involved, there wasn’t a petition to close the playground, he (and other neighborhood kids) were just back on the swings the next day – standing – trying to swing up and over the swing set.

I thought about my own experiences (and the scars still visible on my hand and both knees) from my own childhood mishaps while at play.  But I also thought about the feeling of swinging over a creek on a vine – and making it to the other side – or those perfect summer days playing a pick-up game of ball.  In fact, most of our play was on the street or in empty lots rather than an actual playground.

It was a long drive so this took my mind to the way in which nonprofits have had to create a dynamic in which there is a BIG PROBLEM that has to be defined in order to capture donors and volunteers.  Hammond defined a “play deficit” and the “play deserts” that cause physical, emotional, and intellectual harm to our children.  He connected these to increasing rates of childhood obesity and poor school behavior and performance.  I don’t doubt this.  Play is not only about learning to get along with people, physical activity, and creativity – it’s also about risk taking and pushing the limits.  KaBOOM! has done a brilliant job of bringing a lot of resources to building playgrounds in places that need one.

However, creating this negative frame of reference always bothered me when I was running a community-based organization.  Sure, my communities were some of the poorest in the region – communities that had lost their economic heart and a lot of young residents when the steel mills closed.  But they weren’t communities without good people, good ideas, and a willingness to work.

The calamity that hit them was created by much bigger international market forces and reverberated throughout western Pennsylvania – and other steel-making places around the country.  But to get the resources needed to reshape still viable residential neighborhoods and support the remaining core of small manufacturers in the region meant defining the negatives – the deficits and deserts – and pushing the assets far down the list.

I remember a drive through one of those communities – Rankin – with Paul Grogan, who was then the President of Local Initiatives Support Corporation (LISC).  Paul noted that the housing stock didn’t look that bad compared to some of the other places that LISC was working.   That comment really frustrated me.  (Sorry, Paul.)  I think I answered with something like, “Does a neighborhood have to reach rock bottom before it’s worth investment?  Wouldn’t we be better off intervening while there’s still some decent housing and a neighborhood to build on?”  (LISC decided that the answer to that was “yes.”)

All of us are looking at a very difficult funding environment in which these critical questions come up every day.  More and more often foundations are asking for the ROI when they make a grant – or less elegantly – where’s the biggest bang for the buck? How big is the problem and how creative the solution?  Do you go to the biggest problems that require the most significant time and resources?  How long do you sustain the investment?  Does that influence the approach?

All big questions – and ones that make me appreciate the challenges in making these decisions.

What’s your experience been like as a grantseeker or grantmaker?  Do the deserts get all the attention at the expense of the gardens that may be facing a temporary drought and just need some water to bloom again or are the deserts so vast they can’t be ignored?